Marijuana in America Part III: Marijuana Production
As legalization proceeds, marijuana cultivation should benefit from modern agriculture. The marijuana farmer in such a market would be more akin to a tobacco farmer today with similar costs and payoffs. We believe that increased participation by farmers in a legalized environment will drive the price of marijuana down to a point that pressures companies to participate in a tobacco-like market based on higher volumes and smaller margins. Start-ups of today must be able to deliver value at these price points to hope to compete with larger, well-funded competitors from the tobacco and alcohol industries as this market matures.